The ICE Futures Canada canola market continued to trend lower during the week ended June 8. The front-month July contract gave way to the November contract month as the dominant value, as traders roll into the new crop. November sunk below the $510-per-tonne mark and closed at $511.10, down $11.90 from June 1.
Fund liquidation was an ongoing feature for much of the week, with rain across much of Western Canada weighing on values. As well, the ongoing trade saga between the U.S. and other countries roiled agricultural markets significantly.
Chinese buying was noticeably lighter, but there are ideas this will change soon as the Asian nation is unlikely to buy major amounts of oilseeds from the U.S., given the current trade battle between the two.
Canola was also under some seasonal pressure as the commodity typically heads lower during the early part of June. Farmer selling took a breather as bids backed away from the $12-a-bushel mark and technical support propped up the market. Weakness in the Canadian dollar was also a feature.
Weather stories and the unpredictable behaviour of U.S. President Donald Trump will likely continue to underpin futures going forward. Traders will be leery of pricing things too cheaply in case of any sudden developments.
In the U.S., the soybean market plunged in value during the week, falling 52 cents, to US$9.6925 a bushel. The accelerating pace of planting in the U.S. was a key reason, along with generally favourable weather conditions. Uncertainty about future trade with China also dragged on prices.
The corn market softened on the week, feeling some spillover pressure from soybeans. The front-month July contract dropped nearly 14 cents a bushel, to US$3.7775. Favourable weather in the U.S. Corn Belt was bearish for values while ideas circulated that Mexico could potentially slap tariffs on imports of U.S. corn. Demand for ethanol and livestock feed helped offset some of the losses.
Chicago wheat futures chopped around for much of the week before closing June 8 at US$5.20 per bushel, down 3.25 cents on the week. Some of the factors keeping the market supported include continued dry weather in the U.S. southern Plains, with conditions in Kansas remaining particularly dry. Excess dryness in Australia and the Black Sea region was also good news for U.S. exporters.